Private education market brings high profits
The announcement by Vingroup that Vinschool, an education network run by Vingroup, will shift to a non-profit status has raised questions about the private education market in Vietnam.
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Non-profit enterprises are businesses established in accordance with the Enterprise Law and operate as normal businesses.
However, the only difference between for-profit and non-for-profit enterprises is that at least 51% of annual profit is used for re-investment to implement social and environmental tasks as per investors’ commitments.
In Vietnam, the British Council also operates under the non-profit mode. It is the English training establishment which requires the highest tuition in Vietnam.
UNIS Hanoi, a non-profit school for both foreign and Vietnamese families in Hanoi, sets tuition at VND500 million a year.
At RMIT Vietnam, also a non-profit school, the tuition for university education is VND500-800 million for the entire training course.
Harvard, one of the world’s most famous universities, is a not-for-profit school. And it is also one of the schools which sets the highest tuition.
A report showed that in 2000-2013, the number of universities (4-5-year training) and junior colleges (3-year training), state-owned and non-state owned, increased by 6.5% every year, which is even higher than the increase in the number of students in the same period, about 6.1% per annum.
The mushrooming of schools in Vietnam shows the appeal of the education sector, though very few schools have announced their turnover and profit.
Vietnamese conglomerates all have or are going to set up schools.
FPT, the Vietnamese largest information technology group, and Tan Tao Group, a real estate developer, for example, have universities bearing holding companies’ names.
RMIT Vietnam, Vietnam-USA Society English Centers (VUS), FPT Education and Apollo Centers are four out of many prestigious schools now operational in Vietnam.
FPT Education is the most effective establishment. Wholly owned by FPT Group, in 2014, FPT Education obtained VND590 billion in turnover and VND171 billion in profit. Its profit margin was high at 29%.
RMIT was the only non-profit university in Vietnam until Vinschool shifted into non-profit education network. It has the lowest profit margin despite impressive turnover. RMIT’s profit margin was 5.5% only in 2014, while turnover was VND1.1 trillion.
While both Apollo and VUS are English centers and have similar operating characteristics, they have different business results.
Established four years later than Apollo (in 1998) and only providing service in HCM City, VUS has turnover three times higher than Apollo’s.
